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Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

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01:00:00

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San Francisco, CA, USA

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Comcast Cable

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

PIXEL WIDTH
528

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480

TOPIC FREQUENCY

Madrid 10, Spain 10, Caterpillar 10, California 9, Us 9, Obama 8, U.s. 7, China 7, Romney 6, Europe 5, S&p 4, New York 3, Greece 3, Nfl 2, Egypt 2, Google 2, Erin 2, Deb 2, Terry Duffy 2, John Ford 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    September 25, 2012
    3:00 - 4:00pm EDT  

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oz, maybe. apple co-founder steve wozniak wants to become an australian citizen. he says he loves the country's broadband network so much he wants to become a citizen. >> dubious reason, but nonetheless i do applause his thoughts on the matter. i have an idea. i'm going to become the american on the show. woz can play the ozzie. >> thanks for watching, everybody. >> "closing bell" is coming up next. hi, everybody. good afternoon. welcome to the "closing bell." i'm maria bartiromo. today coming to you live from cnbc headquarters. >> yeah, i love what they did with the place. i'm bill griffeth. c.a.t. is the plaitest multinational after fedex to warm a weak economy is going to hurt their future products. that's been resonating with some
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investors. we're going to dig into what this all means for investors in just a moment. >> first, let's look at how stocks are trading now as we enter the final stretch. the dow industrial down at the lows of the day as we approach the end at 13,513. we have a decline in the session, about 45 points. nasdaq also weaker. it's too sitting at the low of the day, down 24. s&p 500, weaker by 7 1/2. let's talk more about caterpillar. the stock down 3% after forecasting weak growth through 2015. investors clearly not happy to see another gloomy outlook. even a report showing an uptick in july home sales. >> is this a red flag given the company's status? we posed that question in our "closing bell" exchange today with michael, debra, jeff cox, and our own rick santelli. deb, what do you think? is this a one-time situation, or
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are we starting to see a trend after fedex and now caterpillar? >> well, we're definitely clearly seeing a trend because these aren't small companies that are starting to give us warnings. the thing that worries me about caterpillar is when we look at these jobs numbers every month, the shining spot has been mining. here we go. we're going to start to lose these mining jobs. that's a big concern. >> so what is the issue here? is it china slowing down? is it the u.s.? where would you put the biggest blame in terms of the c.a.t. expectations? >> well, i think obviously with the commodity prices coming down, it's just not going to behoove them to be spending all this money. their inventories were very high. that had been the big complaint against the company. that's where they're cutting back, their inventory. as a company, it makes sense to scale back, but for all of us looking at it market-wise, that's not a good sign. >> michael, what did you make of this? put it in the context of the rally we've seen in the market since the springtime. are we starting to see wear and
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tear now? >> i think anybody that can forecast to 20 15 needs to get a gold medal. that seems like a long time to expect earnings are going to be weak, especially in a world where you have banks paranoid about deflation. who knows how it's going to play out by 2015. that's number one. number two, when you look at industrial broadly caterpillar itself relative to the s&p, that relationship is at mid-2009 levels and may be at a bottom. should you have this hesitation by china to simulate, get resolve, then educational background see a meaningful comeback in the stocks despite those expectations. >> rick, i'm wondering how much this has to do with the fiscal cliff given the fact there are government programs that will be going away at year end. is some of this in anticipation in terms of business going away? >> you know, my opinion, the answer to that question is no. i read a lot of the ceo's
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remarks in the press release. when you're looking at the shanghai index of china in general, fedex, caterpillar, this is a trend, and i don't think it has to do with what could be affected by the fiscal cliff. our last guest who made fun of the guidance out that far, did he have the same thing when the federal reserve and central bankers seemed to have some way to see in their crystal ball 2 1/2 to 4 years down the road? >> stealing my thunder, rick. >> let me counter that quickly. central bank concerns about deflation is very real. whether it's actually going to happen or not is irrelevant. this is about incentives. central banks have zero incentive to see a repeat. they will force reflation as much as they can globally to prevent that event. >> yeah, i want to pick up with that 2015 theme because i can't imagine you would think that's a coincidence that caterpillar would use that specific date of
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2015 when the fed ten days ago told us zero interest rate policy to continue into mid-2015. i've been talking to economists about this this all day today. i talked to michael hanson at bank of america. he used the expression "very long road ahead." everyone is seeing that right now. how else could you feel? this is what the fed is telling everybody. they've managed to do a lot of other things but also scare the bejesus out of some people. >> but deb, we get more positive data on housing and more evidence that maybe the housing market is starting to turn the corner. >> bill, bill, bill. that isn't really positive data. when you go back a few years, you'll see that they set the bar so low on these home builders that now they're jumping this very tiny bar and going, yay, we did so good. >> you're not seeing a continued decline. you're starting to see a turn
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around here. >> we've also seen a lot of home builders go out of business. so they've picked up a little bit of their business. >> that's how a free market works. >> it's definitely how a free market works, but i can pretty much tell you that there are a lot of home regents in this country that are doing very badly. so again, the home builders are trying to sell themselves as doing really well. you have a ton of hedge funds that made this trade that home builders were going to recover. they've got a lot pushing at that to keep that trade going and make it win. >> my question is, who else is vulnerable here? jeff, you said caterpillar's warning sends an ominous message about what's happening in the world. what other companies do you believe could be susceptible to this and perhaps could warn the way c.a.t. and fedex have? >> let's look at that. we have fedex. we have norfolk southern that also recently warned. these are important companies because they're at the core of the dow transports. i keep saying this over and over. the dow transports are not confirming this rally.
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that's got to be troublesome. maybe not over the short term, but in the near term and in the long term you have to watch that. that is the bell weather for economic growth. just the same way caterpillar is. i want to just piggy back on this real estate situation. my wife is in real estate. i can tell you that banks are so tied up right now, it is so difficult to get homes through the system right now that i don't see this recovering any time soon. >> all real estate local boys. you well know. thank you, all. talk to you later. let's get to some breaking news right now in madrid. >> we want to show you some live video that's coming in courtesy of the leading newspaper in spain. these are the protests that have turned violent in the center of madrid in the area around the parliament building. we have seen police beating the protesters. we have heard explosions. we don't know what they are because we haven't seen the typical plumes of smoke that are normally associated with tear gas, nor have we seen gas masks. there has definitely been
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violence. about an hour ago, there were reports of 15 arrests. certainly that number has gone up because we've seen people taken away. you can see where they've set up a number of police vehicles in the center of what's called the neptune blplaza. they're protesting what are expected to be big cuts in spending and also big increases in taxes when a new budget comes out on thursday. once again, it has turned violent. they are supposed to leave the square in 20 minutes. their permit runs out in 20 minutes. i don't think they're living. we'll have to watch and see. guys, back to you. >> that's a safe bet. keep us updated. thank you very much. coincidence or not as that builds there in madrid, our market is starting to head south here in a big way. we're at the lows of the session now. >> and worsening. >> right. about 50 minutes left, down 62 points right now. that is the low for the session on the dow. >> stick around. we're just getting started on this bez si edition of the "closing bell."
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are central banks holding back a global economic recovery? find out how he says you should navigate the mine field of monetary policy next. investors with a lot of money in the market turning less negative on stocks. and it's all thanks to the fed. so why aren't they more worried about our nation's crushing debt problem? and another fumble for the nfl. will the latest officiating nightmare force the league to flinch in its labor dispute with the referees? it's all ahead on the "closing bell."
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it's getting worse for the dow here. the industrial average now at this hour down 83 points as we head toward the close. just in the last few minutes, we've seen the declines amid the protests that are escalating in spain. based on where we are headed, it would be the dow's third straight lower day. courtney reagan is in the middle of it there at the new york stock exchange. what are you hearing? >> it all started so well earlier today, bill.
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we had that better than expected home price index. the best consumer confident rating we've seen in seven months. if you look at that chart, it's obvious what we're seeing in spain. definite definitely taking the wind out of the sails. we saw crude oil slipping. that's what happened to equity. also, comments out of philadelphia, confusing the markets a little bit about qe-3, what will happen, what the aim is with with those interest rates in the long run. like you said, we're coming off those lows, but we lost about 20 points or so in the dow in just a couple minutes after michelle came on and showed us some pictures and explained to us what was going on over there in spain. traders certainly did pick up their attention, pick up their heads, and began paying attention to what's going on over there. >> thank you so much. so how are investors feeling about the value of their investments since president obama took office? we look at the latest survey, which we'll talk about more later in the program.
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34% of americans say their investments are better off than they were four years ago. just 29% said that they were worse with 28% about the same. the facts are the s&p 500 has skyrocketed over 70% in that time, of course, due to the central bank stimulus action. so what's the disconnect? joining us with answers so that and more is the pimco ceo. good to see you. thanks for joining us. >> thank you, maria. >> let me get your take with what's going on in spain right now. we've been looking at these pictures of protesting. it certainly feels like things are worsening there in terms of the unrest and certainly the economic challenges. what's your take on the latest? >> it's an indication of how difficult it is to go from designing a response to implementing it. one of the problems you have in europe is that parts of the populations are just fed up. they've had enough. so you start getting rejection. it's most acute in greece where
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you've had economic, political, financial, and social rejection. the pictures that michelle showed us are getting people worried that we're starting to get rejection in spain too. in addition to all that, spain has its issues with the regions. so it's a political element that complicates the economics right now, maria. >> in terms of the impact globally, you know, you've got a slowdown happening in china. you can debate how bad that slowdown is. we heard from fedex. we heard from caterpillar. what do you think is behind some of this guidance from these large corporations in terms of what they're seeing on the world with stage? >> a couple things. one is the globe is slowing down. if you look at the high-frequency u.s. data. yes, they're not perfect. they're partial. but they're telling us we're growing at about 1%. we know europe is going through a recession. we know china is slowing down. in terms of top-line revenue, that is having an impact. >> i see. >> now, companies cannot squeeze
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costs again. it's one of these things you can't do over and over again. so the top-line revenue pressure is going to translate into profits. what they're telling us. >> what are you expecting going forward? do you expect further sort of talking down the numbers, more companies to come out and lower estimates? perhaps this is part of the reason you're seeing this market actually deteriorate right here. >> absolutely. because what's happening is a wedge between what the fundamentals are telling us and the impact on companies and what the policy and what investors are willing to do just on the policy side. remember, the fed is trying to create a wedge between fundamentals that are down here and valuations that are up here. that puts investors in a really tough position because of how big that difference is becoming. >> where does the fed play into all of this? all of the stimulus, the free money, obviously has been great news and a big boom for the stock market. but now that you have fundamentals sort of colliding with that, how does this play
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out? because obviously the fundamentals are pretty weak. >> so the dilemma for the fed is like what everybody's having with the replacement officials in the nfl. we know they're not first best. we know they're not the best ones out there. they are second or third best. but we expect them to be perfect. and that's the problem that's occurring with the fed. we know the fed doesn't have the right tools to deal with the problems. they need help from other government entities. other government entities are literally on strike. they're not coming in. so the fed is involved, but the expectations are so high that the fed is not going to be able to deliver on economic outcomes. >> how does that play out? what does that mean won't be able to deliver economic outcomes? >> it means we'll see them engage more and more. yes, we've seen qe-1, qe-2. we will see even more with the hope that at some point the fed would have ended up providing a bridge for other entities. if they don't, the investment
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theme is going to go from betting on the fed liquidity to positioning for the collateral damage that the fed will create. >> are you expecting a sizable decline in this market in the next couple of months, and how do you invest around that if you are? >> a lot will depend as to whether the tail winds come back in. the reason why the market has done so well is that the risk of a recession in the u.s., the risk of recession in europe has been removed by the central banks. that's why the markets have done so well and rightly so. if that risk comes back in because our politicians don't sort out the fiscal cliff, then the market will come back down. that's not a baseline expectation, but it is a risk that we look at every single day. >> how do you invest around it if we see something materialize? >> carefully differentiate what the fed controls directly so that can impact valuations on the mortgage market, valuation in the treasury market. they can suppress volatility. and what the fed can only impact
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indirectly where you can expect a lot more volatility. scale it properly. second, spend a lot of time differentiating because we're going to see a lot of differentiations going on within asset classes. finally, be careful of the tail risk. it's very much a differentiation story. this is no longer simply betting on the market for the removal of the tail risk, which is what the story has been so far. >> are you going to stay where you are, or would you consider taking over the role of egypt's new prime minister? >> oh, no. i am so happy here, maria. i have no interest. in addition, i think there are so many better people, including the prime minister who is there now, to do this. it's really important that that come from inside egypt. i have the best job in the world. i have absolutely no desire to go anywhere. >> since the reports are out there, speculating you at the helm, i had to ask. always wonderful to have you on the program. thank you. >> thank you, maria. meantime, the protests are continuing at this hour in madrid, spain.
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the protesters there were scheduled to be leaving soon, but it doesn't look like that's going to happen any time soon. they've been wrangling with police, essentially protesting the austerity measures as the spanish central bank gets ready to make a formal request for aid from the ecb on thursday. we don't know the terms of that. that's being worked out right now. just ahead of that, the protesters are protesting what is expected to be a program like what we saw in greece. >> tough going, bill. something's got to give, right? >> exactly. >> could see more social unrest across europe. >> in the meantime, it's taking its toll on our markets. the dow and the other major averages just off the lows of the session right now. we're down about 80 points at this hour. >> it's a tale of two companies that hate each other. apple stock hitting a speed bump while google hits another high. which is a better buy? we'll look at apple versus google next. >> also, that company is on the verge of bringing driverless
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cars to california. >> uh. >> yeah, in california that's going to go over big. will that make the roads safer? >> this should go well. >> you can see that on the 405. what happens if it malfunctions and someone gets hurt? will google stock be hit because of lawsuits? we have more on driverless cars in california coming up. customer erin swenson bought from us online today. so, i'm happy. sales go up... i'm happy. it went out today... i'm happy. what if she's not home? (together) she won't be happy. use ups! she can get a text alert, reroute... even reschedule her package. it's ups my choice. are you happy? i'm happy. i'm happy. i'm happy. i'm happy. i'm happy. happy. happy. happy. happy. (together) happy.
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welcome back. we want to show you a live picture of what's going on right now in madrid.
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the protesting has been going on for several hours now on the ground in spain. people are protesting the severe austerity measures that are being proposed by the government. things have turned violent, as you can see there. there's been fighting. the police have escorted and dragged some protesters away. it's been a tough situation all day, bill. >> this was a planned protest, but it was far bigger and more violent than was anticipated. i mean, they were expecting something along the lines of an occupy wall street. in fact, they're calling this protest there occupy congress because they were trying to surround the congress build there. >> the police have pushed protesters away from the parliament building as the spaniards protest all of this austiner it austerity in the u.s. meanwhile, self-driving cars. it could soon be reality in california. no, it's not the automakers
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bringing it to the golden state. john ford is at google headquarters with the story. >> reporter: google and self-driving cars, california's governor about to sign a bill that moves those really close to being a reality for everybody else here in california. he's going to arrive here in just about 20 minutes. now, last year nevada signed a similar law that allowed self-driving cars on the road. that just went into effect this year. california is the big deal here because there are more than 30 million licensed vehicles on the road in california, making it the biggest state for cars by far. last month california -- sorry, google announced that more than 480,000 miles had been driven in the self-driving, driverless cars without an accident. that's a pretty big deal. they're hoping that this technology will spread. one thing to note, google uses these cars to collect map data, which is one advantage they've got over apple going forward in
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the maps mess. back to you. >> so how does it work, john? you just program where you're going and just plug in and -- i mean -- >> enjoy the ride? >> reporter: yeah, the car's got sensors that give it a sense of where it is on the road. google has mapping data that also communicates and lets the car nowhe where it is on the ro. the same folks who worked on street view for google also worked on this car. >> interesting. john ford, thank you. drive safely. ride safely, i guess. speaking of google, that stock continues to rally to a new all-time high, even as rival apple trades lower again today, backing awhat from that $700 it achieved recently. with that in mind, which of the two bitter rivals should you be betting on right now if you could buy only one of the two? let's talk numbers on apple and google today. on the tech any call side, mark newton with gray wolf execution partners. and on the numbers side, mark
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weiss. i think you've been calling for profit taking on apple. i'm going to bet you're liking google. >> you're right. both stocks are clearly stretched and in need of consolidation. if you look at charts, we can look at google's monthly chart going back to '07. we see this con sal dags that's been intact over the last several years. the stock is just starting to emerge from a longer term consolidation. it's moved to new all-time high territory. this is a stock that's just starting to emerge. apple shows a little bit of a different picture. the stock really over the last 6 to 12 months has been extended. if anything, volume has been a lot less on this recent move to new high territory. we see the channel. apple's gotten a little overdone on a monthly basis. rsi on apple is a gauge for
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monthly momentum. this is overbought. it hasn't really started to really fall precipitously yet. we've seen a sign of slow down, which makes me think that google is a little bit better of a risk/reward. >> okay. mr. trader weiss? >> i think am gives you much more upside than google. google used to be a very cheap stock. right now it's selling just below its growth rate. apple, however, it's taken some hits. it always does after a product launches. they've got a lot more products to come out in the future. probably near term. that's going to propel growth. the biggest mistake with google right now is as you talk about the self-driving car, as we talk about the eyeglasses, those do nothing for earnings. 95 to 98% of their revenue comes from an ad model. you're really talking about an advertising company. that's kind of rich. i like them both, but apple gives you more upside. >> very interesting. a little disagreement there on the technical and fundamental
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side. good to see you both. heading towards the close here, still hovering near the lows of the day. >> 70 points lower, near the lows. meanwhile, barry dealer telling cnbc he's not too hot on social media stocks. >> when you look at acquisition targets, are we in a bubble? when you look at these stocks -- >> they're all over. when you have multiples, double, mid, 30, 40, 60 times, where are you actually going to say there's value? there's only value there in such prospective takes on the business. that's awfully hard to justify. >> but even after saying that, there is one name he likes a lot. we'll tell you what it is straight ahead. s a, the nation on the verge of falling off the edge of the fiscal cliff, but investors with a lot of money in the market are turning less bearish on stocks.
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welcome back. some eye-opening results in cnbc's exclusive all-american survey today. mitt romney edges the president on who will be better to curb out debt and deficit. but the president is ahead on who's better to get the economy back on track. steve liesman is here with the disconnect. >> we've been puzzling over this all day. i want to show you the results we have from our national survey of 800 americans. take a look on the economy. who would be better over the next four years. first of all, we asked people, are you better or worse with compared to the last four years? no question here. 55 to 27 definitively, things are worse. what about who's better over the next four years? obama beats romney by nine point. that's more than other surveys out there. caution here, weak survey.
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other surveys more interested in the political side. they survey registered and likely voters. how about jobs? six to two, worse on jobs. who's better? obama wins. the one place where romney wins is as maria said, on the next one, on the deficit. overwhelmingly, people think the deficit is worse than it was four years ago. they're right. they say romney, only within the margin of error, which is 3.5%, plus or minus on this poll. take a look at the next series of charts. romney wins hands down on who will be better to invest for you. who do you want to coach your favorite team and who would you want to hang out with? about five to two americans pick obama. that may be part of the reason for obama's support here. another fascinating issue here is obama looks to have neutralized what would normally be a republican edge on the issue of taxes. who will increase your taxes? 45% of the public says obama. 42% say romney. you can see the reverse here on
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income groups. poorer people think that obama will not raise their taxes. they think romney will. the reverse when it comes to wealthier people. this is interesting. one other thing i want to show you is change in racial support. latinos, compared to our june survey, more support for obama on the economy. african-americans overwhelming support. romney is winning the independent vote, but not in enough numbers to overwhelm this huge advantage that obama has among non-whites. you can read all about this from our exclusive all-america survey at cnbc.com. don't miss it. >> all right. we will not. stick around there, steve. more reaction to all this right now. >> we bring in peter bookbar as well as christopher wayland. chris chris, are you surprised this survey shows romney is better on
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debt and obama is better at the economy? >> no. it remind me of 1936 when fdr ran for re-election. unfortunately, they were wrong and we went into a terrible decline after that. you know, americans are naturally optimistic. they see that kay shiler is up the past three months. they figure housing is getting better. i can tell you from our perspective at tangent where we spend our time raising money for funds and private companies, that's not the case. >> peter, what about in the meantime we have the fiscal cliff issues. is that keeping the markets in check right now? what do you think investors are waiting for or hoping for come december 31? >> well, the s&p 500 is near a multiyear high. i think the fiscal cliff is not what they're thinking about right now. i think right now, and i specify that the market's time has shrunk dramatically, the focus on this tug of war between the central banks and the reality
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that on the other hand the economy is slowing down. i think the markets will focus on the fiscal issues on the first tuesday in november. >> peter, what do you think is going on today? at the end of the day we saw the selling accelerate at the same time as the protesters in spain. things seem to be heating up there as well as of course the issues on the economy here. at the end of the day, we definitely did see a pretty good sell off. >> i think it's all the economy right now. i've been of the opinion that the fed news on september 13th culminated a central bank rally and was not the impetus for a new one. i think the reality of slowing earnings growth, a recession in europe, a dramatic slowdown in china, and potentially a recession in the u.s. is now front and center on investors' minds and will continue to be as we go through q-3 earnings. >> i think investors are watching carefully what the policy will be coming out of washington regarding the capital gains tax before they make their investment decisions, don't you? >> i think that's a big issue.
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although, i spent a little time trying to put the in trade numbers up against wall street. doesn't seem to be any correlation between in trades guess on who's going to win the election and what happens to the market. there was some correlation back in the summer, but that seems to have come off. if you take what peter and chris were saying, which is the importance of the fiscal cliff issue to wall street, it strikes me that there is no edge either way on solving the fiscal cliff issue from either an obama victory or a romney victory. i don't think they say an easy wait out with any particular candidate. >> one thing you've got to remember is that the public markets are not the only markets. the markets i'm focused on are private markets. we have gridlock because of the uncertainty, whether you talk to corporate treasurers or bank treasurers. >> but which uncertainty, chris? >> well, tax rates, the fiscal policy, what's going to happen with the fed. >> you heard romney say he was basically go to either slightly
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increase taxes for the wealthy or leave the same at the expense of the middle class to keep the middle class tax rates down. i'm not sure anybody is expecting a huge break from a romney victory if you hold him at his word. >> steve, they can't do a deal with with the republicans in the house. that's the problem. i think we go over the cliff myself. >> well, we're going. >> all fiscal policy has to go through congress. that's a tough roadblock right now. gentlemen, thank you all. >> thanks so much, guys. we have a market that is at the lows right now. down about 70 points on the dow jones industrial average. we have 20 minutes before the closing bell sounds. >> you saw it earlier, barry diller slamming social media stocks. does he have it right? and here's a good one. more young people are cutting up credit cards and putting their money into savings accounts. big change. that's good news for the financial situation, but is it signaling red flags for the economy? >> we'll look at that coming up. for what's around this corner... and the next. there's cash flow options from pnc.
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welcome back. another push lower as we head toward the close with about 18 minutes left. the dow down 86 points. i believe that's the low for the session right now. selling started about an hour ago, just as the austerity protests were intensifying in madrid. we're starting to see the dow
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down 85 points and holding there. >> tough day on the banks as well as technology. of course, that has been the leadership sector on the upside in 2012. so technology moving lower today. >> in the meantime, social media stocks have been among the lowest performers at the nasdaq today. >> i want to start out with the strength. take a look at google. you can see how things started falling off about an hour ago. google charging ahead to a new all-time high today. eric schmidt says we're in no hurry to develop an app for maps. i wonder why. those social media stocks, september has been fabulous for them. boy, that rally has really come to an end this week. they are down hard again today. back to you guys. >> let's talk about this market selloff as we head toward the close. larry canter with barkley's is with us and erin. larry, what do you make of this
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selloff? how much of it do you think is a response to the austerity protests under way in madrid? >> i don't make much of it. i don't think it has much to do with madrid. >> really? you don't think europe is a big issue? >> sure, i do. i'm just saying everybody looks for a reason for every up and down move on a daily basis. right now, you just have more sellers an buyers. you're coming off a very, very good run. by the way, we think the ecb and the fed have taken a lot of the downside risk off the table. we'd be inclined to buy into this. >> okay. also, in addition to what you've laid out, there are also renewed worries about the third quarter earnings season. we end the quarter this week. the estimates are still looking like things are rosy, even though we've seen a number of situations where profit expectations have come down. so erin, what are you looking at in terms of the earnings for the
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third quarter? what's your expectation? >> we're looking for continued surprises. similar numbers to similar positive surprises to what we've seen in the past quarters. >> positive surprises? >> yes, positive surprises. nothing exceptional, but in the same range where we see more positives than negatives because analysts have ratcheted their estimates down so far. we do expect them to continue to decrease their 2013-year estimates. so we continue to see those estimates come down. >> and you've lowered your gdp estimates, haven't you? >> exactly. we've lowered it. we started off the year at 2.5%. we're down to 1.5, 1%. with the recent announcement, we're much more optimistic. we also expect the market to end up higher for the year. we still expect 2013 to be a rough year. >> larry, i saw your report on the global story. you said you'd buy into this sell off today.
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are there areas of the market you think are more vulnerable than others if we were to see things deteriorate from here? >> i want to make it clear. i agree earnings are coming down. they have been coming down. everybody's been running down their estimates of earnings. that's not really the story here. it's a story about one relative valuations. you can't yields on bonds anymore. high grade u.s. corporate secret now yielding under 1% in real terms where as u.s. stocks are priced to earn 4 to 6% in real terms. then you have the fed basically having exhausted interest rate cuts targeting asset prices as a way to stimulate the economy. you have the fed on your side. that's what's good about this environment. >> that would seem to suggest a floor on this market, erin. do you feel like we are seeing wear and tear in this rally? would you take profits here? what are you doing? >> no, we still believe in buying. there's still value out there. there's still obviously strong stocks. one thing i would say is we're
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definitely more biased towards u.s. equities versus european still, even with the ecb announcement. >> in terms of the vulnerable parts of this market, larry, do you see any? >> well, i think there's -- for one thing, if you look at what's going on in china, they are gradually shifting away from investment spending and construction and toward the consumer. for example, we like the energy more than we like the materials. so i think that is one thing that we're looking at in terms of sectors. health care looks very cheap, although with good reason given all the regulatory uncertainty here with the election coming up. yeah, so that's basically it. >> all right. thanks, everybody. we appreciate it. see you soon. we're in the final stretch here. just 12 minutes before the closing bell sounds. we're at the lows right new with the dow down about 86 points. >> coming up, it's all anybody's been talking about, that blown call that decided the packers/seahawks gain me by a replacement ref. why some don't think it will do
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welcome back. we have breaking news right now with ally financial.
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kay lla with the story. >> ally is nearing the end of a sales process for its international businesses, which fetched over 15 bids due last friday according to it people with familiar with the matter. among those bidders, general motors, which had previously disclosed its interest, as well as td bank of canada. many of the bid are for one or more of the business lines. ally said in may it hired citigroup and ever core to sell those. an ally spokesperson said it is, quote, encouraged by the breadth and depth of interest. bids are set to value the businesses close to tangible book value, according to people familiar with the matter. a sale announcement, i'm told, could come within the next month. treasury has recouped roughly a third of its investment in ally. that would be a further step toward that recovery. >> isn't that interesting,
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kayla, that three years ago in the middle of the upset, the financial disaster nobody wanted to touch this business? >> you couldn't give the stuff away. >> now you're seeing these bids come in at good levels. >> you are, maria. it's also interesting to note that even in the first rounds of bid, more than 30 banks bid on these asset, which also tells you not only is there demand for them, but banks need yield. a lot of them are looking to these awe though loans to be able to find that. it's unclear where the bids will come out, but i think it's a great sign for this business. >> all right. thanks so much. it's interesting when you look at this market here where we have come from from the financial collapse. yet, europe continues to be one of the main issues for the global economy. we're looking at this materialize. >> i think there's a correlation of some sort today. remember now, the spanish central bank has to ask for this aid from the ecb. the conditions have to be negotiated ahead of time, which
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is what's going on right now before thursday. so the protesters are out there right now letting their voice be heard as an anti-austerity measure, much like we saw in greece, where the protesters were out protesting the austerity measures they knew were coming there. it becomes inevitable at some point. >> it does, but you have to remember the domestic issues. we know the earnings estimates are probably too high. s&p was looking for a kron traction in earnings in the third quarter and an increase in the fourth quarter. it could also be positioning ahead of the end of the third quarter. >> but the markets coming off those highs right now. the dow down about 83 points. we'll come back and recap the day with our closing countdown. >> and after the break, terry duffy is my special guest for the entire 4:00 hour. don't miss his take on where the economy is headed. you're watching the "closing bell" on cnbc, first in business worldwide. [ male announcer ] when this hotel added aflac
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it's back to volume again. right now as the markets are -- the selloff is intensifying here. this will be the worst day we've seen for the three major averages roughly in two months. so going back to july. >> and things really worsened at the end of the day here. that's when you saw the heavy selling come in. final half an hour. >> i don't know. coincidence or not, show the next one. gold, oil, and the dow. all three started selling off about the same time. it was about noon eastern when we started to get more pictures coming from madrid and the protests there. >> and it looked like the protesting was intensifying. you had cops pushing back protesters. >> much bigger, much more violent than was anticipated. gold, i will say, gold options were going off the board today. you saw it was backing away from 1800. a lot of those 1800 calls going by the wayside. the selling was intensifying because of that. here's the dow heat map. here's where any strength or weakness might be.
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it's all going to be weakness right now, as a matter of fact. you have a few kpoecomponents t are still positive. >> you have jpmorgan down 1.5%. wells fargo down about 3% earlier. the technology the big group on the downside. >> these are the pictures out of madrid right now. is this live, guys? yes, it is. okay. so this was a protest that was planned. it was expected to end peacefully. they would just move on. but it has been anything but. it's taken on a life of its own right now with the size and the violence that's involved right now. i think that's taking a toll on this market here, don't you? >> i'm going to get ready for the 4:00, bill. terry duffy on the next hour. >> say hi to terry. the best and worst performers today, oklahohome depot. a pick up in home prices it there. i think the market is starting to turn around. some people might disagree.
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home depot is higher on that. of course, the caterpillar warning today. the second major corporation we've seen recently with warnings. fedex was the other one. the only positive sector -- well, in fact, it just turned negative. larry cantor with barkley's is still there at the new york stock exchange. you were talking about health care earlier. it was the only sector that was positive. you still like that sector, right? >> that's probably the cheapest sector. >> any particular companies you like? you just like the sector itself? >> we like the sector, yeah. >> okay. warren myers is there as well, i think, as the new york stock exchange. why the intensity of the selling into the close? >> i think we had an overexaggerated run up with quadruple expiration last week. we're due for a selloff. we had some negative commentary about the fed's policies and suspect nature of th